Confusion regading pension for Tier 1 total earnings

[Saga]

Hi all,

Will my total earnings (gross salary) for Tier 1 visa include the pension deduction?

The guide line clearly states about that salary before tax is included.

But its a bit ambigous about pension. The policy guidance says that the "money paid to the applicant as a pension" is NOT included. Is this the amount that the company contributes or is it the actual deduction from my own salary ?

My example:

Monthly salary : £2000
Pension deduction is £60 from my salary and then the company contributes on top of this.

Whats my gorss salary ? £2000 or £1940

This will severely effect my eligibility for Tier1 and so I'm very worried.

Thanks for your help !

[mvent00]

What gross salary is mentioned in your payslips/contract/letter from employer? Whatever it is, you can claim that.

[ChetanOjha]

Guidance refers to the the amount contributed by your company.

You can very well claim the amount you are contributing towards pension "from your gross salary" i.e. mentioned in your payslips.

[Saga]

Thanks for ur replies.

Here's the problem.

I have few months payslip where it states the following:-

Salary £2000
Gross Pay £2000 , 4000, 6000 and so on.

Later the company changed its policy from deducting pension BEFORE deducting tax and NI . The later two are deducted from the amount after pension.

The payslips after this change indicate this:-

Salary still says £2000
Gross pay then accumulates £1940 onwards from here and is indicated accordingly.

Basically 'gross pay' as mentioned in the payslip has changed bcoz of policy change NOT because of any change in my earnings !

Thanks !

[ChetanOjha]

Does this affecting your earning band? You can also get letter from your company which can mention actual gross (as it used to be) and net salary. If you can get a letter you don't have to submit payslips and you can sail through.

Thanks for ur replies.

Here's the problem.

I have few months payslip where it states the following:-

Salary £2000
Gross Pay £2000 , 4000, 6000 and so on.

Later the company changed its policy from deducting pension BEFORE deducting tax and NI . The later two are deducted from the amount after pension.

The payslips after this change indicate this:-

Salary still says £2000
Gross pay then accumulates £1940 onwards from here and is indicated accordingly.

Basically 'gross pay' as mentioned in the payslip has changed bcoz of policy change NOT because of any change in my earnings !

Thanks !

[tvn_ramesh]

Does this affecting your earning band? You can also get letter from your company which can mention actual gross (as it used to be) and net salary. If you can get a letter you don't have to submit payslips and you can sail through.

That would be a good evidence esply. for ppl who are tight on earnings points if the employer can do that favour in the firm of properly documented letter

[Saga]

Hi all,

Unfortunately it does effect my earning band.

Can I ask what is the exact definition of 'gross salary' vis a vis pension ? The guidance notes only say that gross is before tax. There's no mention of pension. What is the generally understood definition in this country ?

Many Thanks !

[mvent00]

Hi all,

Unfortunately it does effect my earning band.

Can I ask what is the exact definition of 'gross salary' vis a vis pension ? The guidance notes only say that gross is before tax. There's no mention of pension. What is the generally understood definition in this country ?

Many Thanks !

Yes, it is before tax. Letter from employer would be suffiecient evidence. You do not need to show payslips then. As per Tier 1 guidance notes, you are entitled to claim points on the earnings where it is a contractual obligation on the employer’s part to make these payments.

[Saga]

Hi,

I read through two similar discussions here
http://www.immigrationboards.com/viewtopic.php?t=49152

and here
http://www.immigrationboards.com/viewto ... sc&start=0

Seems this pension issue does not have a definite answer.

If 'gross' definition does not include pension (as in the payslips), how can the employer letter indicate it does ?

Thanks !

[Saga]

Just to clarify, when I say pension I mean PSS - Pension Salary Sacrifice.


....

[email257525]

my understanding gross earnings is the amount, on which an employee will pay tax and ni.

So tecnically gross earning is gross for tax.
Because in the payslips some times there are expenses included in gross amount but these expenses are the onces which are re imbursed to you which you have already spend from your own pocket and employer is just returning you back that money, so you dont pay tax and ni this.

Basically any money you are paying tax and ni on it can be claimed as earnings for tier 1 general. As if HMRC is happy then HO is happy.


Hope it helps.

So if some one have different calculations in the payslips and try to present the employer letter thinking geting the favour from employer, HO will find it out on what amount you have paid tax in your payslips etc.

Regards.

[Saga]

Thanks for everyone who replied.

You can also get letter from your company which can mention actual gross (as it used to be) and net salary.

My employer can give a letter like this. However, I need some clarifications on the letter format.

I am planning to ask them to mention the following in the letter:-

Gross salary
Gross salary after Pension
Net salary (after tax and NI deduction)

These will be all same for the whole 12 months.

However, IF checked , the net salary paid in bank for the last 9 months will not match up with the 'Gross salary' but 'gross salary after pension' !

Would this then indicate a mismatch in my claimed earning band?

I am not planning to give payslips as evidence.

Many Thanks and Happy New Year ![/b]

[hjlp]

I got the same problem, the solution is opting out pension, very unfortunatelly, I know.

SO can make sure I can make HO happy.

Regarding your company letter which i originally I want to do. Suggest you use Gross income before tax and pension, and Net income after tax and pension.

As guidence said "3) Letter from the applicant’s (previous and/or
present) employer(s) confirming that he/she has
received the exact amount claimed: This is a letter on
company headed paper from the applicant’s current
and/or previous employer(s) which clearly shows the
applicant’s earnings during period claimed, and the
date and amount of each payment. This letter should
be dated after the period for which earnings are being
claimed and should clearly show the applicant’s gross
and net pay."
So if you provide more , they find out problem immediately. And you have to hope they only check bank statements, so it will exactly match your company letter. well it will match your p60, just very annoying to show pension list and they know you not paything NI and tax on that part.

Anyway, my HR still refuse to provide letter like this, simply they suspect I am going to jump to another boat as I already had work permit with them!! lol, They only going to corporate with me if some life event happens.

[hjlp]

BTW, let me know if HO happy with using gross income before your pension deducted. I have opted out my pension, but not really ready to apply for tier1.

But I think opting out is easiest way to do, you know hassle free........

[ganeshptrk]

This might be a good news for all those who are opted in for Pension Salary Sacrifice. I enquired HomeOffice if earnings before OR after deducting Pension is considered.

My mail:
From:
Sent: Friday, March 19, 2010 4:52 PM
To: IND Public Enquiries
Subject: FAQ

Hi,

I like to know some information regarding my pension salary sacrifice.

My question is how should I calculate my gross income for earnings. Is it before deducting the pension salary sacrifice (PSS) which is contributing from my basic salary (other than company pay) or after?

For example if my gross salary is GBP1000 per month. The pension salary sacrifice is GBP100 per month. Then should the salary be 1000 or 900 pounds. The guidance says gross income before tax will be considered. As all you know in this case, tax is calculated on 900 pounds and not 1000 pounds since pension contribution is tax exemption.


Thanks & Regards


HOMEOFFICE reply:

From: IND Public Enquiries <UKBApublicenquiries@ukba.gsi.gov.uk>
Date: Mon, Mar 22, 2010 at 7:05 PM
Subject: RE: FAQ


Dear Sir/Madam,

Thank you for your enquiry.

Please be advised that gross salary for the purpose of immigration means that the salary that is paid to you before any deductions including any deduction made for pension deduction. In your case this means the salary you have to show is £1000.00 pcm.

I hope that this information will be of assistance to you.

Yours faithfully,

Amrit Haria
Immigration Group
UK Border Agency

If you intend to reply to this e-mail please ensure that you re-send all the information from your original enquiry.


Thanks

[worriedmr]

Thanks Ganesh for posting the email sent to you by the BIA regarding the salary sacrifice.

Just wanted to know that if u have applied for extension and if yes was that sucessful.

I am in the same boat as you so would like to know.

Also u are making the salary sacrifice for Pension Contribution Allowance. If ur Employer is topping it on ur salary sacrifice have u included this in ur Gross Salary.

Pls let me know.
Thanks in advance

[ganeshptrk]

I didn't apply for the extension. But my colleague applied for initial Tier 1 and got it approved. If HomeOffice had not considered his pension contribution, his application would had been rejected.

And we SHOULD NOT include employer's contribution in total earnings.

[worriedmr]

thanks ganesh. it is a relief to know

[worriedmr]

Hi

Just wanted to let everybody know I recently applied for Tier-1 and got approval. I included my pension sacrfice and employer pension contribution too. And caseworker gave me full points which I asked.

[ganeshptrk]

Hi worriedmr
Are you sure you included Employer Contributions as well into your earnings and case worker awarded points for that..? I think pension contributions from employer cannot be included while calculating earnings. It should be employee contributions.

Can you please confirm this.

[manojk005]

I contacted HomeOffice recently about salary sacrifices which include pension salary sacrifice as well as child care vouchers. Child care voucher is also considered as a salary sacrifice for Tax purpose. However these are considered as earning by HO.

Since, UKBA's Reply on my e-mail for salary sacrifice supports e-mail reply to ganeshptrk from UKBA, there is every reason that it should be counted as your earning. In another thread, one person counted child care vouchers in his earning, which was accepted by HO. As per HMRC, both pension salary sacrifice and child care vouchers are same as both are salary sacrifice.

Also under "Glossary" at UKBA site, it clearly says that Gross salary is defined as "The amount your employer pays you before tax and other official deductions have been made."

My e-mail to HO (which was copied from this thread and edited before sending):

from Manoj Kumar <----------->
to UKBApublicenquiries@ukba.gsi.gov.uk
date Mon, Jun 28, 2010 at 3:50 PM
subject FAQ
mailed-by gmail.com
hide details Jun 28 (3 days ago)

Dear Sir/Madam


I am currently working in the UK. I am seeking some clarification for
calculating my previous earnings for Tier 1 (General) visa
application. I like to clarify some information regarding my pension
salary sacrifice, which is contributed by me from my gross salary.

My question is how should I calculate my gross salary for previous
earnings for Tier 1 (General) visa application. Is it before deducting
the pension salary sacrifice (PSS) which is contributed from
my gross salary (other than company contribution) or after?

For example, if my gross salary is GBP 2000 per month and pension
salary sacrifice by me from gross salary is GBP 100 per month. Then
should the gross salary be GBP 2000 or 1900 per month? The guidance
published on UKBA website says that gross income before tax will be
considered. As you know in this case, tax is calculated on 1900 pounds
and not 2000 pounds since pension contribution is exempted from tax. I
would appreciate your reply in this regard.


Kind Regards,



UKBA Response:

from IND Public Enquiries <UKBApublicenquiries@ukba.gsi.gov.uk>
to Manoj Kumar <-------->
date Thu, Jul 1, 2010 at 10:29 AM
subject RE: FAQ
hide details 10:29 AM (55 minutes ago)
> Dear Sir,
>
> Thank you for your enquiry.
>
Please be advised gross earning is your total income before any income
tax or pension deduction which will be considered as your earnings.

An applicant's overall total earnings can include those from several
sources of work, including a combination of salaried employment and
self-employed activities.



> Yours faithfully,
>
Umar Saif
Immigration Group
UK Border Agency

___________________________

This might be a good news for all those who are opted in for Pension Salary Sacrifice. I enquired HomeOffice if earnings before OR after deducting Pension is considered.

My mail:
From:
Sent: Friday, March 19, 2010 4:52 PM
To: IND Public Enquiries
Subject: FAQ

Hi,

I like to know some information regarding my pension salary sacrifice.

My question is how should I calculate my gross income for earnings. Is it before deducting the pension salary sacrifice (PSS) which is contributing from my basic salary (other than company pay) or after?

For example if my gross salary is GBP1000 per month. The pension salary sacrifice is GBP100 per month. Then should the salary be 1000 or 900 pounds. The guidance says gross income before tax will be considered. As all you know in this case, tax is calculated on 900 pounds and not 1000 pounds since pension contribution is tax exemption.


Thanks & Regards


HOMEOFFICE reply:

From: IND Public Enquiries <UKBApublicenquiries@ukba.gsi.gov.uk>
Date: Mon, Mar 22, 2010 at 7:05 PM
Subject: RE: FAQ


Dear Sir/Madam,

Thank you for your enquiry.

Please be advised that gross salary for the purpose of immigration means that the salary that is paid to you before any deductions including any deduction made for pension deduction. In your case this means the salary you have to show is £1000.00 pcm.

I hope that this information will be of assistance to you.

Yours faithfully,

Amrit Haria
Immigration Group
UK Border Agency

If you intend to reply to this e-mail please ensure that you re-send all the information from your original enquiry.


Thanks